Spirit Blockchain Capital (CSE: SPIR) has announced its intention to settle a payment obligation totaling $50,000 to a third-party consultant by issuing common shares in lieu of cash. The company stated that the arrangement stems from services provided under an existing advisory agreement with an arm’s-length party.
As part of this settlement plan, Spirit Blockchain is set to distribute an aggregate of 810,417 common shares. These shares will be issued at varying deemed prices, reflecting the value of services rendered over different periods or terms. Specifically, 291,667 shares are to be priced at $0.06 each, 218,750 shares at $0.08, and 300,000 shares at $0.05. The differing prices suggest a tiered structure designed to account for fluctuations in valuation or timing associated with the consultant’s services.
Regulatory Compliance and Lock-Up Period
The issued shares will be subject to a mandatory holding period. The company clarified that these shares cannot be traded for a duration of four months and one day from the date of issuance, as per standard securities regulation practices. This lock-up is intended to ensure compliance with Canadian securities regulations and to prevent immediate resale of shares in the open market, which might impact price stability.
Furthermore, Spirit Blockchain emphasized that the completion of this non-cash settlement remains conditional. It requires there to be no objections raised by the Canadian Securities Exchange (CSE) and must align with all applicable securities laws governing such transactions.
U.S. Regulatory Limitations
The company also addressed compliance with U.S. regulations. None of the shares being issued as part of this settlement have been registered under the United States Securities Act of 1933. Consequently, these securities cannot be offered or sold within the United States unless an appropriate exemption from the registration requirements is met. This stipulation ensures that the share issuance remains outside the jurisdiction of U.S. securities oversight, thereby reducing regulatory complexity for the company.
Strategic Use of Equity for Operational Flexibility
This move reflects Spirit Blockchain’s broader financial strategy of leveraging equity instruments to manage liabilities, especially in cases involving external consultancy and service agreements. By opting to settle through share issuance instead of cash, the company may be aiming to preserve liquidity and redirect available capital toward core operations or investments.
The transaction also underlines Spirit Blockchain’s adherence to legal and regulatory protocols across jurisdictions, particularly in relation to securities offerings and investor protection. As with many similar arrangements in the blockchain and tech sectors, this share-based settlement structure helps balance operational commitments while fostering strategic partnerships.
This development follows the company’s pattern of using flexible financial instruments as part of its broader roadmap in the digital asset and blockchain investment space. Market observers are likely to interpret this step as a practical measure to honor obligations while minimizing cash outflow, a tactic that is often adopted by growth-stage companies aiming to sustain momentum without diluting core financial reserves.
